RBC2 comments are in: When might CUs see a draft final?

ALEXANDRIA, Va. (4/28/15)--CUNA anticipates the National Credit Union Administration will issue a finalized version of its revised risk-based capital proposal (RBC2) in late 2015 at the earliest.

The comment period for the proposal closed at 11:59 (ET) Monday, and more than 1,900 comment letters were filed as of late Monday afternoon, close to the same number as were submitted on the original proposal.

"The fact that about as many credit unions will comment on this second proposal as did on the first is an indication of the interest and concern credit unions still have with the issue," said Bill Hampel, CUNA's chief policy officer. "It's also evidence that issuing the proposal for a second comment period was the right thing to do."

"The NCUA has a lot of reading to do before producing a final rule. In our comment letter, we recommended withdrawing the plan because it's just not needed. If the board decides to proceed, we expect it will take until late this year or early next year to finalize a rule."

Hampel added that while RBC2 contains significant improvements, further changes are necessary to better reflect the realities credit unions face under the current system.

"If it's not going to be withdrawn, we listed a number of suggestions for further improvements from RBC21 to RBC2," he said.

Two additional major issues CUNA has with RBC2 are:

CUNA does not believe there is a need for a new regulation on interest-rate risk management; and

Significant concern with the proposal's new requirement that, in addition to meeting Prompt Corrective Action net worth and RBC ratios, a credit union's internal capital planning and strategies would become subject to examination and supervision.

"We think that the 7% leverage requirement and the risk-based capital requirements are more than sufficient, for regulatory purposes, for determining capital adequacy," Hampel said. "Any additional supervision on each credit union's capital plans and adequacy is not necessary."

The NCUA told News Now it would report on the final number of comments it received on RBC2 early Tuesday.

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